Microsoft has run a steady course even as the Middle East IT sector passed through one of its toughest periods in more than a decade.
Its .NET platform snag-ged some major enterprise wins in the Gulf, thus building up momentum for an IT infrastructure solution that could become as pervasive as one of Microsoft's earlier Windows operating systems.
Gains are also being made in the Small and Medium Enterprises (SME) space, where until recently Microsoft had only a marginal presence at best.
With the IT sector coming out of its blues, it is as good a time as any to listen to what Mohammed Kateeb, regional director of Microsoft Middle East, has to say about some of the initiatives that will leave their stamp on the IT roadmap.
Gulf News: You have been a very vocal proponent of the .NET. How far have the Middle East markets taken to it?
Mohammed Kateeb: When we announced .NET during the Internet hype, the media wrote stories from the consumer perspective which was to do with buying and selling goods and services on the Web.
But with the hype settling down, we have moved towards a better understanding of what .NET is all about. We finally focused on the basics of .NET, which is connectivity. To connect the world, you have to start with the inside of the organization and before you connect the organizations you connect the people within the organisation.
Today, .NET in the Middle East is at a level where we are going and working with all those companies trying to get connected internally to generate a profile of their customers and their partners. Once you have connected the organization internally, then you can connect externally.
As far as .NET is concerned, the external part is still in the infancy stage in the region. On the internal part, I am happy to say that most of our customers have projects going connecting the internal systems, thus making sure that there is no island of information within the organization.
You will see some aggressive companies in the region that will have projects for the external connectivity over the next two or three years.
To summarize, we are on the road towards achieving what we planned to achieve with .NET. We have taken the basic steps first and we are doing a good job of it.
The regional IT market has been suggesting a very good financial year for Microsoft in the region. What is your verdict?
Due to the political situation, for instance the short war in Iraq, we had to recalculate our estimates and forecasts. But the governments in the Middle East understand that these problems are not going to be solved in a day, and are of the opinion that business is not affected.
Therefore, even during the midst of the war there were many major projects that we undertook in the region. While I cannot provide any numbers, I believe we had a very good year and our growth was really healthy. It exceeded all our expectations.
There's been a lot of buzz surrounding the Bahrain e-Government project with which you are closely involved. Could you give us a look in?
There will be a lot of exciting information coming out of Bahrain in the next 30 days. We have been working closely with a lot of the Ministries and are coming to an understanding of their needs.
And Iraq would be next? We have already started work in Iraq, and have identified a team for it. Iraq will be one of the top three economies in the Middle East within the next five years and we are taking this market very seriously.
The only thing is the security issue. This is slowing down our operations in Iraq. We are looking forward to working with the authorities in developing Iraq.
The Small and Medium Enterprises (SME) sector space is another of your priorities. Where does Microsoft stand right now?
When you look at the economic growth of US and Europe, you will find the major contributor being the SME segment.
I believe we are late in the Middle East because the level of automation within the SME space is at the very minimum. With multinationals moving into the Middle East, the SMEs will have to compete with them. Their costs have to be low, and this means they have to automate.
I think Microsoft is ideally positioned to provide the SMEs with the necessary solutions. SMEs today are easily contributing to 35-40 per cent of Microsoft's bottom line in the Middle East. This is the highest growth segment for us in the Middle East.
The challenge with SMEs is that there are so many of them. Reaching them one-on-one is very difficult. We have created a huge call centre at the Dubai Internet City and we talk to them on technological benefits that they can avail of.
Where do you place Linux's challenge in the overall scheme of things?
When people say Linux, they think free software and open source. When we talk about free software we know that the cost of software itself is miniscule as compared to the total cost of running an IT department. When you look at the TCO (Total Cost of Ownership), you have to look at many elements and measure the cost over years. In addition to the cost of software, you have to look at support, deployment, people, and the skills of the people using the software.
IDC, the independent research firm, found out in a recent study that the TCO of a Windows platform over five years is 10 to 11 per cent less than a Linux implementation.When we look at the open source discussion, what is the value of having the source code open?
Is it the ability to view and understand the software for security reasons? Microsoft operates on the shared source principle where we show our source code to governments all around the world including the Middle East. Universities across the globe have programmes that are doing research on our software.
So being able to see the source code is not a unique factor as far as Linux is concerned. We need to understand what openness is all about.
The third issue is licensing. Linux people don't believe in Intellectual Property Rights. This is the biggest problem in the Linux world. How can one be sure that the code of software that has been contributed by programmers across the world to create this Linux software is unique and is not lifted from somewhere else? This is a big legal concern.
That is what the latest SCO-Linux lawsuit is all about. Now SCO is suing every single user of Linux because they believe parts of their UNIX code is being used in Linux. As a matter of fact, the Gartner Group came with a recommendation that every customer should stay away from Linux until this problem is sorted out. This is a serious issue. The model is broken basically.
But this is not all about it. Let's look at the impact on the economy. How do you expect local software companies in the Middle East to innovate and create a healthy software industry that exports world-class software abroad and get a return on their investment, when Intellectual Property Rights are not protected? Why would they employ people and do R&D in the first place if they can't get commercial returns?
The recent spate of virus attacks has used weaknesses within Microsoft's software. What would you tell your existing clients and future ones about this issue?
You have to understand the issue within a historical perspective. Before 1995, we had PCs like islands whether it was at home or at office. Overnight the Internet turned the lights on and every single computer was seamlessly connected through the Web.
The software was designed for single use and all of a sudden they were open to the whole world. It happened so fast that there was no preparation for such a sudden change and the virus attacks that we are experiencing today.
This is not a Microsoft issue alone, but an industry issue. Every single company creating software products running on the internet had the same security problems. You simply hear about Microsoft more because we have more than 90 per cent market share on the desktop, but it's really a common problem for all.
Microsoft was the fastest company to respond to this challenge however. Let me give you an example. A month before the latest virus attack, we had already issued a warning and asked customers to download a patch from our Windows Update site.
Any company that wanted the patches or listened to what our engineers had to say could have used this facility. The companies that did not utilise this facility were the ones who were affected.
We are a responsible leader and we understand that the issue is affecting the computer industry. We being the largest providers of technology, it is in our best interest to rectify this issue. We have a firewall in Windows XP which very few people use. The moment you turn the firewall on, 90 per cent of the security threats are gone.
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